Baby Bonds are in the news again with this Wall Street Journal article discussing states considering issuing them for newborns as a way to address poverty.
A new investment program being tested in some states makes the case: what if the poorest children started life with some money in the bank.
That is the premise of a program catching on among Democratic leaders around the country. So-called baby bonds have been discussed in at least eight states and lawmakers have approved programs in Washington, D.C., Connecticut and California.
The idea is for the government to deposit a few thousand dollars into a trust account for each infant born to parents below a designated income level. As adults, the beneficiaries can use the money—plus investment returns—to help pay for education or a home.
Baby bonds were envisioned by economists Darrick Hamilton of The New School, and Duke University's William Darity Jr. Hillary Clinton floated the idea of a federal program during her 2008 presidential bid.
The proposed baby bonds are different in purpose from earlier versions numismatists may be familiar with - bonds featuring images of babies.
American Numismatic Association member Mack Martin won the Howland Wood Memorial Award for Best-in-Show in numismatic exhibiting at the 2014 Chicago World's Fair of Money in Rosemont, Illinois. Martin's exhibit,
Baby Bonds, featured notes issued in Georgia and Louisiana after the Civil War that were used to fund Reconstruction efforts.
Martin, who previously won best-in-show awards at Central States and Memphis Paper Money Show, said he began collecting Baby Bonds in 1975 .
That started me collecting everything I have ever had a chance to buy, he said.
For Martin, the fun of collecting Baby Bonds is researching the history behind them through archived records. Only two states in the South, Georgia and Louisiana, issued Baby Bonds. In Martin's home state of Georgia, the use of Baby Bonds was short-lived before the Federal Government shut the program down. Georgia Baby Bonds were likely issued for less than a year, and those that were redeemed were destroyed, which makes Georgia bonds exceedingly rare, Martin said.
Here's more information from the ANA article on Martin's exbibit.
Georgia Baby Bonds
Informally known as Baby Bonds these certificates were authorized by the Act of December 14, 1878. These six year 4% bonds had a redemption date of January 1, 1885 and paid interest via six 4% interest coupons which were clipped from the bond annually during its life. The coupons are worth 20 cents and payable yearly by the state treasury office in the cities of Albany, Americus, Athens, Augusta, Columbus, La Grange, Macon, Savannah, and Rome. Signed by the treasurer John W. Renfroe and the Governor Alfred H. Colquitt. This $5 bond dated January 1st, 1879 has an imprint American Bank Note Company of New York. The image of baby Renfroe Jackson is at the left and the state coat of arms is at right, adjacent to the series of 6 coupons. These bonds also have a fancy ornate green back as illustrated.
Louisiana Baby Bond
Right after the Civil War in order to avoid US currency taxes, Louisiana came out with the "Baby Bond." Although it was a bond it was used as currency. A nice vignette of baby in bonnet, these bonds were affectionately called "baby bonds" because of the baby on each bond plus the small denomination of $5 which allowed many individuals to purchase them and help the state of Louisiana during the period of reconstruction after the Civil War.
To read the complete WSJ article (subscription required), see:
Could $3,200 ‘Baby Bonds' Help End Poverty in America?
To read the earlier E-Sylum article and the original ANA piece, see:
NOTES FROM E-SYLUM READERS: AUGUST 31, 2014
Exhibit featuring Reconstruction-era bonds wins Howland Wood Memorial Award
Wayne Homren, Editor
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